457(B) Deferred Compensation Plan
An opportunity to take advantage of tax-deferred income for your retirement.
A 457(b) Deferred Compensation Plan may provide you with an opportunity to take advantage of tax-deferred income for your retirement. Corebridge Financial brings you the knowledge, investment options and personal services to help keep things simple.
Current federal income taxes on all contributions, interest and earnings in your 457(b) DCP are deferred until withdrawal, usually at retirement. Tax-deferred earnings, coupled with the power of compounding, may provide greater growth than might be possible with current taxable savings methods. Remember that income taxes are payable when you withdraw money from your account and restrictions may apply to withdrawals prior to age 59½.
You contribute by convenient payroll reduction before federal income tax withholding
is calculated. This helps reduce your current taxable income so you can save more for retirement with money that otherwise would have gone toward income taxes. In addition, your salary deferral contributions made to the plan are not generally subject to the 10% federal early withdrawal tax penalty.
Check out this year’s contribution limits.
Access to your savings
Generally, depending on your employer’s plan, your account contributions can be distributed in any of the following events:
- Reached age 59½*
- Severance from employment
- Your death
- Unforeseeable emergencies
In addition, distributions are not generally subject to the 10% federal early withdrawal tax penalty except on amounts rolled into the 457(b) plan from other non-457(b) eligible retirement plans.
We offer an array of innovative investment options from well-known investment managers. This provides the flexibility you might need to design a unique program tailored to your individual needs. Keep in mind that investment values will fluctuate so that your investments, when withdrawn, may be worth more or less than the original cost. Remember investing does involve risk, including the possible loss of principal. Your financial professional can assist you in choosing the options that will match your long-term goals.
* In-service distributions for money purchase pension, defined benefit and governmental 457(b) plans – the Miners Act reduces the minimum age for in-service distribution from pension plans (i.e., money purchase and defined benefit plans) from age 62 to age 59½ and, for governmental 457(b) plans, from age 70½ to age 59½. The provision applies to plan years beginning after December 31, 2019, 401(a) money purchase, and 401(a) defined benefit and governmental 457(b) plans. An employer must make an election to apply this provision.
Tax-free loans, which are available under some governmental 457(b) plans, enable you to borrow against a portion of your accumulated account value, subject to certain limitations, without permanently reducing your account balance. Remember that defaulted loan amounts (not repaid on time) will be taxed as ordinary income.
Corebridge: Moving financial futures forward
At Corebridge Financial, we believe everyone deserves financial security. We’re helping people take action toward their future goals with our broad suite of retirement solutions and insurance products. Every day, we work hard to make it possible for more people to take action in their financial lives—because action is the bridge from planning to outcomes, from today’s financial needs to tomorrow’s aspirations.